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  • Question

    Under these circumstances, would the contractor prevail, under estoppel to prevent the Government from retroactively going back to the time of inception of the contract, to compute and recoup damages, as the result of overpayments made due to CAS non compliances. In sum, does the circumstance that a finding of CAS noncompliance occurred after the completion of a contract, make null and void the Government s rights to recoup overpayments do to CAS noncompliances. Or would the Government rights to recoup damages be limited to the time of issuance of the Notice of Potential CAS noncomliances?


    Answer

    Estoppel is a legal issue and should be discussed with legal counsel. Estoppel is an affirmative defense and based on the information provided, it does not appear that the contractor relied on Government actions to its detriment. The subject contract includes the CAS clause that requires the contractor to agree to an adjustment of the contract price or cost allowance, if the contractor fails to comply with CAS and such failure results in increased costs paid by the Government. The contract clause requires that such adjustment provide for recovery of increased costs paid by the Government, together with interest from the time the payment was made to the time the adjustment is effected. Accordingly, the fact that the Government’s finding of the contractor noncompliance after the completion of a contract would not negate the price adjustment requirement.

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